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Combatting the Big Data Conundrum using Antitrust Law | | |
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< | Digitalization and data analytics have transcended the traditional understanding of markets and their regulation. Data has become crucial to gain efficiencies, but has also been used to gain competitive advantages and market power. The latter could result in competition foreclosure, exclusionary practices, and anti-consumer effects. In fact, 79.4% of participants in a survey feared displacement by competitors with data cultures. This is concerning for two reasons - (1) big data capitalism is dominated by few companies like Facebook and Google, and this could result in the big getting bigger; and (2) legislatures around the world are struggling to devise regulations vis-a-vis data, given its overarching effect on society, and the economy. Despite this, the European Commission (EC) and the German Federal Cartel Office (FCO) have used antitrust law to regulate the impact of data on not just competition, but also consumers' data rights. | >
> | The objective of this paper is to urge India's nascent Competition Commission (CCI) to learn from the European Commission (EC) and German Federal Cartel Office (FCO) about the significant value of antitrust law as a means to combat the omnipresent concerns posed by big data.
This is of extreme importance, given that digitalization and data analytics have transcended the traditional understanding of markets and their regulation such that, data is being used to gain competitive advantages and market power, which in turn causes competition foreclosure, exclusionary practices, and anti-consumer effects. In fact, 79.4% of participants in a survey feared displacement by competitors with data cultures. This is concerning for two reasons - (1) big data capitalism is dominated by few companies like Facebook and Google, and this could result in the big getting bigger; and (2) legislatures around the world are struggling to devise regulations vis-a-vis data, given its overarching effect on society, and the economy.
Accordingly, I will first highlight important instances where the EC and FCO have used antitrust law to regulate the impact of data on not just competition, but also consumers' data rights. Thereafter, basis these global experiences, I offer certain recommendations to the nascent Indian antitrust regime in the hope that it could result in efficient and holistic progress. | | |
I'm not sure why "Despite this." The paragraph is rich in information, but it does not make its argument clearly.
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< | In this brief paper, I highlight important instances of such regulation, and argue that regulators must embrace enforcing antitrust law to regulate data. Lastly, given that India's antitrust regime is nascent, I provide some recommendations based on global experiences. | | |
This clarifies that the draft is a sales pitch for a product: "Antitrust law—You need it to regulate your country's part of the global data economy." I think you would be more effective putting it right at the top and then launching into the information about why your solution is needed to solve a problem your information defines.
| | | India’s unbridled focus on digitalizing its economy has outpaced its legal regime. A comprehensive law on data protection was proposed only in 2018, the right to privacy was not recognized as fundamental until 2017, and India’s antitrust merger law was given effect only in 2011. Consequently, companies have unsurprisingly seized data-related opportunities to gain advantages. Illustratively, in 2014, a competitor acquisition by India’s leading cab aggregator aimed at gaining an advantage over Uber was not notified to the competition regulator, as the transaction did not exceed merger thresholds. Additionally, an abuse of dominance complaint against WhatsApp? for revising its terms to permit sharing of its user data with Facebook was dismissed.
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< | Thus, it is imperative for India to retool its existing antitrust regime to begin tackling the data conundrum.. Firstly, India must amend its antitrust merger law to account for transaction value, as this will enable detection of digital transactions. Additionally, despite the lack of data protection laws, the regulator could consider consumers’ privacy-concerns under the garb of quality competition, and in the context of network effects. Lastly, India must consider establishing a committee of competition, data and privacy experts with comparative knowledge, to help educate and aid the regulator with this emerging challenge. | >
> | To that extent, it is apparent that the CCI is somewhat behind in understanding the significant role that antitrust law can play in regulating the impact of data (as evidenced in the above section). This is not to say that antitrust law is the only solution to combatting this conundrum. Rather, my argument is that, at present, antitrust law is an already existing and develop(ed)ing body of law that can be employed to tackle the conundrum, while suitable data protection laws are developed per global best practices. Accordingly, I urge the CCI to retool its interpretation of the existing antitrust regime to consider consumers' privacy concerns under the garb of quality competition, and in the context of network effects. In my view, this could be a good and easy to implement first step, given that the CCI has already disregarded the "free" aspect of multisided markets, as consumers offer their data in exchange for the "free" service. Further, to whatever extend possible, I propose that India's antitrust merger law be amended to account for transaction value, as this could allow for better scrutiny of data-relater or technology based mergers and acquisitions. Considering that this may be a tall order, I alternatively suggest that the thresholds associated with deal notification exemptions be made an "and" requirement instead of an "or" requirement, and/or that the these threshold numbers be reduced. That is, presently, the CCI exempts notification of mergers/acquisitions where the target company has assets and a turnover of less than Indian Rupees 3.5 billion or 10 billion respectively. If the requirements vis-a-vis this exemption are qualified by an "and" rather than "or", then it is possible that Facebook's acquisition of WhatApp? (which was not noticed to the CCI), and like transactions become notifiable. In my opinion, such an amendment would not pose too many difficulties, and would allow the CCI to - (1) be more vigilant; and (2) better use antitrust law to combat the big data conundrum. | | |
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Bala Note to Prof. Moglen - I completely understand the concerns you have pointed out vide the comment above. However, I would think that the recommendations posed above do not pose concerns to extent that you have pointed out. I say this only because, the Indian competition regulator has already been active in making necessary amendments vis-a-vis technology mergers and acquisitions. For instance, a recent amendment was made to provide effect to a green channel filing for simple mergers. At the same time, prior to my enrollment in Columbia, we had suggested amending merger control laws to reflect transaction value, or alternatively revise the existing merger thresholds to lower numbers so that tech acquisitions can come within the fold of the commission's jurisdictions. This was received with great interest, and is still being discussed.
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